Africa is the talk of the call center community, and the region is well positioned as the next high growth market for business process outsourcing (BPO).

As brands (clients) continue to geographically diversify outsourcing locations, the pressure is on BPOs in emerging markets to deliver. African nations investing in the outsourcing sector, and BPOs throughout the continent, must be ready to successfully manage an influx of diverse clients with challenging requirements.

Every country that has a mature BPO industry today was once a new and emerging market at one point in time, including the Philippines. In every emerging market for BPO services, past and present, there are success stories, accompanied by challenges, growing pains and, often, overhype that can lead to unrealistic expectations.

In this article, we’re going to focus on the challenges faced by BPOs in Africa, so let’s go…   

Key questions we must ask

Over the past five years, outsourcing contracts from U.S. brands (clients) to BPOs in Africa have skyrocketed and customer experience (CX) leaders are asking similar questions:

• How are BPOs in Africa performing compared to other offshore and nearshore countries?
• Can BPOs in Africa support U.S. customers effectively?
• What is the speed to proficiency given the newness of the market?
• What about data security and geopolitical issues?
• How do we cut through the noise to get accurate marketplace information?

We’ll address these and other concerns, unpacking the challenges and opportunities ahead. Let’s dive in.

Are we beyond the hype storm in Africa?

As an industry, we are always seeking the next “hot” outsourcing market—specifically, countries that offer competitive costs, access to talent, and an infrastructure and business climate conducive to BPO sector growth.

Geographic diversification into new markets is critical as it provides CX leaders with competitive outsourcing options. De-risking from over-reliance on mature and saturated geos has been a trend for years. However, a thoughtful approach to selecting the best outsourcing partners in the right nearshore/offshore locations is critical.

An overzealous approach into new outsourcing destinations is often a recipe for negative outcomes. Remember when India emerged as a call center haven for voice services? A mad rush ensued, and the market was built up as a low-cost unicorn until challenges such as accent issues manifested, which led to the decline of voice outsourcing and the rise of other outsourcing disciplines in India.

Our focus shifted to the Philippines, which overtook India to become the world’s primary location for English voice services. The BPO industry employs 1.5 million workers, and the industry comprises 8% of the Philippines gross domestic product (GDP).

The Philippines has enjoyed an expansion in the BPO sector which is poised to grow in the coming years. And yet, market saturation, attrition, performance, and other concerns are causing CX leaders and brands to shift outsourced headcount from the Philippines to emerging markets like Africa.

The reality of Africa’s BPO industry

Several African countries have rapidly ascended to the forefront of offshore BPO outsourcing. Africa offers an abundance of talent in Egypt, South Africa, Kenya, Rwanda, Ghana, and other countries.

According to Statista, BPO growth in Africa is projected to reach $8.14 billion in 2025 and 6.31% annually thereafter. For corporate brands seeking a burgeoning outsourcing region, Africa offers many advantages, which we covered in our article Outsourcing to Africa: Top Countries for BPO.

While the data and trends point to expansion for the African outsourcing industry, “growing pains” will accompany a rapid rise of any emerging geo. Call center outsourcers (BPOs) with sites in Africa are not immune to the challenges faced by call center operations in other countries.

Here are a few of the major concerns in Africa today:

Challenges in Africa

Leadership

Experienced and stable frontline leadership can make or break your outsourcing programs—we all know this. Leadership depth and skills are often the root causes of performance, staffing, training, client services, and other issues. Per feedback from brands that outsource to Africa, this is a major area of opportunity. The rapid growth of Africa’s BPO sector, particularly in support of U.S. brands is likely the reason why frontline leadership and “bench” strength are still developing. As Africa matures in the BPO sector, leadership talent should strengthen, provided that BPOs invest in effective leader development programs that align with the customers they’re supporting.

Impact Sourcing isn’t enough

Sourcing for impact is a socially conscious business practice where companies intentionally hire individuals living in persistently high unemployment areas with limited career opportunities. Job creation leads to generational economic impacts in many countries. However, customer experience, performance, quality, staffing, and KPIs are equally paramount.

In my article from February 2023— Impact Sourcing requires Impact Performance—I discuss that impact sourcing should not be a BPO’s sole differentiator. BPOs focusing on hiring for impact are only as good as their employees, leaders, and performance outcomes.

Some BPOs in Africa engaged in impact hiring are missing the mark on matching employee skill sets to client-specific requirements, often leading to subpar service delivery and missed KPIs. Job creation is critical, but these jobs will be lost to other outsourcing regions if BPOs in Africa struggle to deliver consistent results.

Performance

Based on stacked rankings and client feedback, performance is a mixed bag. In many cases, Africa BPOs are outperforming other offshore and nearshore geos in record time, and with greater speed to proficiency. And in other cases, performance is on par or lagging behind other geos.

BPOs must not assume that a competitive price in a new and untapped market is enough to attract new business. Retaining and organically growing clients, particularly U.S. clients, requires a Total Cost of Ownership (TCO) approach. Africa BPOs that rank high in performance ratings, quality, and other metrics execute on TCO better than BPOs with high turnover and consistent performance issues.

Pace of growth

Rapid growth without a strong leadership team, solid foundation, and stability, will put a strain on BPOs. Outsourcers that are pursuing new clients and expanding, must ensure that the organizational DNA is sound and ready for growth. Some BPOs have grown so fast that clients are concerned the pace of growth will overshadow the essentials of “call center 101” such as front-line leadership, performance management, training, WFM, quality, etc. The right approach is stabilizing existing clients before chasing new logos, so that your resources aren’t stretched, and your organization is well positioned to deliver on commitments.  

Attrition

The BPO industry is a powerful job and career engine, especially in countries that offer an abundance of highly skilled talent. Lower attrition is often touted as a major advantage in offshore outsourcing markets faced with persistent and high unemployment rates, especially for the 18-35 age group. However, a contrarian trend has emerged in some areas—higher than expected attrition at the agent and leadership levels. The newness of the BPO sector, availability of new BPO job opportunities and very high demand for frontline agents and leaders, could be a contributing factor. BPOs in Africa must get a handle on attrition through competitive pay rates, amenities, strong frontline leadership, and a best-place-to-work culture.

Saturation

The “S” word has started to pop up in some emerging markets such as South Africa. Global BPOs have poured significant investment into African countries by expanding with new site locations, or buying existing BPO sites in Africa, to establish a foothold.

Again, it feels like market saturation could be a thing, but the reference points are anecdotal for the most part. We will experience saturation in every global outsourcing market—this is unavoidable. For example, look at what’s happening in Colombia with saturation. Relatively speaking, we’re not raising alarm bells (yet) about market saturation in African countries. In fact, there is still a lot of runway and growth potential.

People and agent sentiment

BPOs worldwide, not just in Africa, must be cognizant of employee sentiment. Given the newness of the BPO industry in Africa, employees have taken to social media to express positive and negative feelings about their employers.

In our research report on global agent sentiment, agent feedback is heard loud and clear. BPOs worldwide, especially in developing markets, must pay extra special attention to the needs of their people.

You’ve all heard the phrase: People don’t quit jobs, they quit leaders. If leadership is unfocused or unstable, expect the same from your agents. The BPO’s cultural essence must be positive, welcoming, competitive, and people centric. These are essential to job satisfaction, agent retention, and client satisfaction.

Vendor management support

Clients have expressed concerns that, in some cases, they are having to provide more vendor management and onboarding support than initially expected.

A client should never “teach” the BPO the basics of performance management, communication, staffing, daily blocking and tackling, and other base level essentials. If this is happening, there is a deeper issue. If clients must expend valuable budget and resources to get the BPO’s performance up to standard levels, then questions need to be asked, and the BPOs must step up.

This issue is multifaceted, and it would be irresponsible to suggest that it’s a one-way street. In some cases, clients aren’t investing the necessary resources, time, and collaboration to support their BPO(s), which can also impact the BPO’s ability to succeed.

Summary - The future of BPO in Africa

We’ve been educating brands and CX leaders on emerging markets throughout the world since our inception in 2006. We saw the potential for BPO growth in Africa nearly two decades ago when most African BPOs only supported European, Australian, and African corporations. In fact, we helped source our first client to South Africa in 2014, long before the recent market surge.

In the immortal words of Public Enemy and their 1988 hit record—“Don’t Believe the Hype”—there are too many so called “Africa Experts” spewing hyperbole. Take advice from credible and high integrity sources with a proven track record in Africa. Today's emerging countries for BPO services face similar challenges as their counterparts in other regions. There is no such thing as the “perfect” outsourcing destination or BPO, and no one-size-fits all solution to solving CX challenges.

Africa is well-positioned to become the world’s leader in outsourcing. If brands and BPOs are thoughtful and realistic in their planning, preparation, expectation setting, and delivery. The necessary criteria are in place for CX leaders and BPOs to succeed together and benefit from the incredible people, opportunities, and service excellence that Africa has to offer.